Q1 2025 SK Telecom Co Ltd Earnings Call
Earnings Conference call for the first quarter of 2025 today, we will first deliver a presentation on the financial and business highlights followed by a Q&A session. Please note that all forward looking statements are subject to change depending on various factors such as market and management situations. Let me now present our CFO.
Operator: Let us begin the earnings conference call for the first quarter of 2025. Today we will first deliver a presentation on the financial and business highlights, followed by a Q&A session. Please note that all forward-looking statements are subject to change, depending on various factors such as market and management situations.
SK Telecom Co Ltd's Kim Yang-seo: Let me now present our CFO. Hello, this is SK Telecom Co Ltd's Kim Yang-seo.
Speaker Change: Nordstrom is going as good telecom Shreveport, you done for me, though.
Kim: Good afternoon decisions have Kim CFO of SK telecom.
Youngsop Kim: Good afternoon, this is Youngsop Kim, CFO of SK Telecom.
Kim: She took her payoffs coach and I'm very positive on what she moves her work under an aisle.
Youngsop Kim: I think there will be a lot of concerns from the investors regarding the cyber attack that happened last month. The Civilian Cooperative Investigation Team is currently investigating the exact cause of the leak and the scale of the leak. In terms of the company, we are doing our best not to cause any customer damage related to the fundamental accident.
Kim: Okay.
Kim:
Kim: They've been gone up to them, which was a sudden talk on your true anymore.
Kim: And with Parkway Smeal.
Kim: Cause that tone isn't I'm going to talk about how you're doing on pricing.
Kim: Got you and talk to me about how we see that.
Speaker Change: Before I start the earnings presentation I understand that there are great concerns among investors regarding the cyber security incident that happened last month. He joined public private investigation team is currently looking into possible causes and scope of the incident and SK telecom is doing its utmost to protect our customers.
Youngsop Kim: Before I start the earnings presentation, I understand that there are great concerns among investors regarding the cybersecurity incident that happened last month. A joint public-private investigation team is currently looking into possible causes and scope of the incident, and SK Telecom is doing its utmost to protect our customers from any damage or loss related to the recent incident. SK Telecom Co Ltd. has immediately isolated the suspected hacking equipment and is operating the FDS system, which is a non-normal authentication system, to the highest level, and has completed the registration of the U-SIM protection service for all SK Telecom customers who can be applied currently.
Kim: From any damage or loss related to the recent incident.
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Kim: So don't kind of on boarding SK telecom called Giggled cause long at all.
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Kim: Some clean me, though.
Kim: If it is sure you use imports, obviously injunction and you seem to Chihuahua, when you're trying to quantity we suddenly though.
Youngsop Kim: The dual device of the FDS and U-SIM protection service has the same effect as the U-SIM replacement. Upgraded U-Shin protection service will be applied from Friday and will be available for use during roaming. Immediately after detecting data leak, systems suspected of malware infection were isolated. Also, an enhanced fraud detection system is running at its maximum level to block suspicious authentication attempts. As of now, all the eligible SK Telecom customers have enrolled in USIM protection service. The dual layers of the FDS and USIM protection service bear the same effect of USIM replacement. Starting from today, the upgraded UCM protection service will be applied sequentially to provide protection during roaming as well.
Kim: <unk> upgraded then you shouldn't bosworth discuss some types of human kilo lumen and shared with you as you get into these aren't me though.
Kim: Immediately after detecting data leak systems suspected of malware infection were isolated also an enhanced fraud detection system is running at its maximum level two blocks of specious authentication attempts.
Kim: As of now all of the eligible SK telecom customers have enrolled and using protection service.
Kim: But you all layers of the F D S and using protection service, they're the same effect of your Siem replacement starting from today. The upgraded you seem protection service will be applied to sequentially to provide protection during roaming as well.
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Youngsop Kim: In addition, we are looking for a variety of ways to secure as many U-ships as possible in a short period of time, including the suspension of new recruitment. This is for personal information only. We are also looking for various ways to address the situation, including securing as many USIM chips as possible in the short span of time, along with the suspension of new subscriber sign-ups. We will keep the investors updated on matters related to the incident.
George: George and then following two weird or are you open to the call should or can you walk through how you see me though.
We are also looking for various ways to address the situation, including securing as many use him chips as possible in the short span of time, along with the suspension of new subscriber sign ups, we will keep investors updated on matters related to the incident.
George: Cool.
George: Tim We still took a day scenario.
Youngsop Kim: I will talk about continuity of income of this first quarter.
Speaker Change: Let me now report on the consolidated financial results for the first quarter of 2025.
Youngsop Kim: Let me now report on the consolidated financial results for the first quarter of 2025. The sales amounted to 4,453.7 trillion won. Due to the influence of some of the companies' sales, the sales amounted to 0.5% compared to the previous year. Consolidated revenue reported $4,453.7 billion won, down 0.5% year-over-year due to the sale of certain subsidiaries. Sales profit increased by 13.8% year-on-year, to 56.74 billion won. According to the introduction of 5G, the cost of marketing and the price of the triangle have continued to decline, and the flow of profitability improvement has continued. Operating income posted $567.4 billion won, up 13.8% year-over-year.
Speaker Change: Children, Hi, George Hudson, New Hampshire, but you don't Wanna Kiss them either.
Speaker Change: China is a big argument young at all so none of them GDP Yung Kim will put into comes I asked me, though.
Speaker Change: Consolidated revenue reported four trillion $453 7 billion won downs your 0.5% year over year due to the sale of certain subsidiaries.
Speaker Change: And what are you going to be some some purpose and teaching gun.
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Speaker Change: Which is almost getting EBITA marketing Bianca.
Speaker Change: Wonder if you could come associated with diesel come you'll see soon because one could imagine you'll just need though.
Speaker Change: Operating income posted 567.4 billion, one up 13, 8% year over year profitability improved thanks to the decline in marketing and depreciation costs as the final shoe market matures.
Youngsop Kim: Profitability improved thanks to the decline in marketing and depreciation costs as the five shoe market matures. The short-term net profit is 36.16 billion won, which is 0.1% lower than the previous year. Net income posted $361.6 billion won, down 0.1% year-over-year.
Speaker Change: I'm guessing you're going to and then don't get if you're young from your percent becomes one some Chinese fiction Hugo corner to your question, though.
Speaker Change: Net income posted $361 6 billion won downs your appointed 1% year over year.
Speaker Change: Tom would all hope goes home quiet anybody either.
Youngsop Kim: Next, I will talk about the business results. Next, let me report on business highlights. Yoo Moo-sun's telecommunications business has seen a steady increase in 5G and ultra-fast Internet users. Fixed and mobile business saw a continued increase in 5G and broadband subscribers. AI business continues to grow by 15.6% compared to the previous quarter. AEI business revenue grew 15.6% year-over-year, maintaining a growth momentum. The AIDC business has grown by 11.1% year-on-year and recorded sales of 12 billion won, and has established itself as a business that generates more than 100 billion won per quarter.
Speaker Change: Next let me report on business highlights.
Speaker Change: You move on to machine available in five would you mute torso. So your question on singles day replace them, though.
Speaker Change: Fixed and mobile business saw a continued increase in five G and broadband subscribers.
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Speaker Change: AI business revenue grew 15, 6% year over year, maintaining a growth momentum.
Speaker Change: Yeah. It teaches her wounds.
Speaker Change: It should be that somebody would put into some John Tony She borgwarner it should come home from get on tunnel, when you're talking to be it should remain thrown in his hospital how quick how does have us.
Speaker Change: Congress, a wooden datacenter katami roothold paragate opinion, I'm Jun Zhu periods, just like this.
Youngsop Kim: In the short term, we plan to increase the operating rate of the data center even faster, generate additional profits through GPU Azure services, and prepare for the hyper-scale AIDC in the medium and long term. AIDC business posted 102 billion won of revenue in the first quarter, up 11.1% year-over-year. It is firmly established as a successful business with more than 100 billion won of quarterly revenue. In the short term, we will quickly increase data center utilization rates while generating additional profit through services such as GPU-as-a-Service. In the mid to long run, we will prepare for hyperscale AIDC business.
Speaker Change: Scott Secrets I'm sure that we'll get award winning high post Q.
Speaker Change: T shirts from beer that I can't give you that.
Speaker Change: A D C business posted 102 billion one of revenue in the first quarter up 11, 1% year over year. It is firmly established as a successful business with more than 100 billion one of quarterly revenue in the short time, we will quickly increased data center utilization rates.
Speaker Change: Generating additional profit through services, such as GPU as a service in the mid to long run we will prepare for Hyperscale a D C business.
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Speaker Change: Debbie you should supposedly she took some your push into somebody that runs habit Wuxi view of when it would be true to your question though.
Youngsop Kim: The AX business recorded a profit of 45.2 billion won, which grew by 27.2% compared to the previous year. AI crowd sales are steadily increasing, and A.I. B2B is also contributing to the growth of performance, such as financial management consulting and A.I. marketing.
Speaker Change: Are you close to mid should equal do we need to and got them going to the EAP to be dual.
Speaker Change: Some of them don't call me a market issue.
Speaker Change: All she took some time to queue up with me, though.
Speaker Change: Pitching in pit statistic rich and engine email can never guess when I owe you didn't know how long did you told me she Cherokee neither.
Youngsop Kim: A.B.G. is in the middle of a beta test and will be officially released in the first half of the year. AIX revenue was 45.2 billion won up 27.2% year over year. Along with the steady growth of AI cloud revenue, AI B2B business has contributed to earnings thanks to virtual consultation services and AI marketing services for financial institutions.
Speaker Change: A I X revenue was $45 2 billion, one up 27, 2% year over year.
With the steady growth of AI cloud revenue, a b to B business has contributed to earnings thanks to virtual consultation services in a marketing services where financial institutions.
Doug: Hey, Doug this is conducting a beta test and its schedule for an official launch in the first half of the year after further improving functionality.
Youngsop Kim: Ada Biz is conducting a beta test and is scheduled for an official launch in the first half of the year after further improving functionality. Agentic AI aims to prove its businessworthiness within this year. In this quarter, ADAT, which has surpassed 9 million registered members and strengthened its revenue base, is focusing on increasing user convenience by adding Google Gemini and LineApp to multi-LNM agents.
John: Hey, John.
John: This helps them, whether it's knowhow with somebody that you won't punky took quite a monumental time youll see cookie butter Carolina he doesn't.
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John: Sure.
John: Approachable Emil Yeoman job, 20th century, which you remember we used to me though.
John: If you could give her open with focused search and they're gonna afternoon, how long each home. She focuses launching we will put up with me though.
Youngsop Kim: Aston, which has conducted open beta services in the U.S., aims to launch official services in the second half of the year. In addition, we are determined to demonstrate business feasibility of agentic AI within this year. ADOT has strengthened the profit base with the cumulative subscribers surpassing 9 million in the first quarter. It is focusing on enhancing user convenience by adding Google Gemini and Liner Pro to the multi-LLM agent. Esther has completed an open beta service in the US and is preparing for an official launch in the second half of the year.
John: In addition, we are determined to demonstrate business visibility of Agentic AI within this year, a Dod has strengthened the profit base with a cumulative subscribers, surpassing 9 million in the first quarter. It is focusing on enhancing user convenience by adding Google Gemini and liner pro to the mall.
Speaker Change: T L and agent Astor has completed an open beta service in the U S and is preparing for an official launch in the second half of the year.
Speaker Change: You also should you hung on a day in my son did against.
Youngsop Kim: Next, I will talk about the shareholders' meeting. The 1st quarter distribution fund was decided by the board at 830 won per week, and the distribution date is May 31st. The distribution fund was decided by the board at 830 won per week, and the distribution date is May 31st.
Speaker Change: Chinese seaborne that you don't get paid on Goodman to dunk products, how many people on the road.
Joanne Smeal: Joanne Smeal, Paydown Kitchenaid and I'm always I'm sure you didn't mean, though how.
Speaker Change: How much I can get your choices from London.
Speaker Change: We keep it undo it doesn't give me a bunch of her children, Okay. Duncan Richardson hydro to Cherrypick them do I'll pay down here your chicken and somebody looked at some stuff.
Speaker Change: Let me now turn to shareholder returns the board of directors resolved to set the first quarter D. P. S. At 831 with a record date of May 31st.
Youngsop Kim: Let me now turn to shareholder returns. The Board of Directors resolved to set the first quarter DPS at 831 with the record date of May 31. As a result of the amendments to the Articles of Incorporation approved at the AGM in March, the record date for quarterly cash dividends is designated after the dividend amount is determined in an effort to enhance predictability of cash dividends. SK Telecom will look at the business and management overall through this cyber infringement incident and strengthen its competitive edge. The customer is the foundation of the company, and customer value is ultimately connected to the value of the company and the value of the shareholders.
Speaker Change: As a result of the amendments to the articles of incorporation approved at the AGM in March the record date for quarterly cash dividends is designated after the dividend amount is determined in an effort to enhance predictability of cash dividends.
Speaker Change: SK telecom on your bond Sable, she knows how to get it all help walk me home from bundling.
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Speaker Change: We'll get going here, if I could.
Speaker Change: I'm gonna meal could get caught cheating.
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Speaker Change: Oh, Yeah, Jerome would've so she learns how should you bring somebody on SK Telecom in Korea.
Youngsop Kim: We will do our best to protect our customers and to protect the trust of our customers and investors for the past 40 years. In light of the recent cybersecurity incident, SK Telecom will conduct a thorough and comprehensive review of the business management and further strengthen fundamental competitiveness. Customers are the foundation of the company, and customer value enhancement is ultimately linked to corporate value and shareholder value enhancement. We will mobilize all the resources within the company for customer protection so that we can regain and uphold the trust of our customers and shareholders have placed in us for over 40 years.
Speaker Change: So it's just a eurobond issue literature in August with total Krishna.
Speaker Change: In light of the recent cyber security incident, SK Telecom will conduct a thorough and comprehensive review of the business management and further strengthen fundamental competitiveness customers are the foundation of the company and customer value in Huntsman is ultimately linked to corporate value and shareholder.
Speaker Change: Angela enhancement, we will mobilize all the resources within the company for a customer protection. So that we can regain and uphold the trust of our customers and shareholders have placed in us for over 40 years.
Speaker Change: Corona people thought which is L. A and noticed Europe, when they're coming to a motor protected them either neither.
Youngsop Kim: I would like to ask for your encouragement and support. Thank you. Now more than ever, we ask for your continued support and encouragement. Thank you.
Speaker Change: Now more than ever we ask for your continued support and encouragement. Thank you.
Okay.
Speaker Change: The Q&A session or stuff like this.
Operator: Let's start the Q&A session. Now Q&A session will begin. Please press star 1, that is star and 1, if you have any questions. Questions will be taken according to the order you have pressed the number star 1.
Speaker Change: She can be torturing W. Chicago, neither Tim when they have to put in until Nike bottleneck Quechua.
Speaker Change: She gave her.
Speaker Change: Human there too so as you go man Cave, Hawaii born here in Michigan.
Now Q&A session will begin please press star one that is star one if you have any questions questions will be taken according to the order you have pressed the number of Starwood for cancellation. Please press star two that is starting to on your phone.
Operator: For cancellation please press star 2, that is star and 2 on your phone.
Speaker Change: Tom what else you would add to shape when they go and they can do something with that.
Speaker Change: The first question will be provided by Johns Hopkins from Kb Securities. Please go ahead with your question.
John Sop Kim: The first question will be provided by John Sop Kim from KB Securities. Please go ahead with your question. Thank you for your question.
Speaker Change: There are two mortgages coming at all.
Speaker Change: Maybe some confusion.
Junseop Kim: I'm Junseop Kim from KB Electronics. I'd like to ask you two questions about the cyber infringement case. The first is about the number transfer. I heard that the number of transfer users was higher than usual due to this incident. I wonder if you have a position or response to this.
Speaker Change: So you won't see that whole question as well.
Speaker Change: When we spun deal or to come to an end point or we don't want to get on.
Speaker Change: How old are you know, although you don't quite tell you to survive.
Speaker Change: Nonetheless.
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Speaker Change: I would go to one thing.
Junseop Kim: And the second is about the new recruitment. You recently stopped recruiting after the cyber infringement incident. How long will this pause last? And I wonder how much impact it will have on sales. If you answer, it will be a big help to understand the current situation. Thank you.
Speaker Change: Oh, sorry about <unk>, how would you choose.
Speaker Change: And then I saw the day each from Doug You've got you know they manage to OTT tool what did come down the road.
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Speaker Change: Oh, that's interesting as all of you.
Speaker Change: I'm done.
Speaker Change: I'm Kimpton sell from Kb Securities. Thank you for the opportunity to ask your questions I have two questions related to the recent cybersecurity incident. The first one is about our customers switching to another mobile operators I understand that the number of customers switching to other immuno.
Kim Joonsop: I'm Kim Joonsop from KB Securities. Thank you for the opportunity to ask you questions. I have two questions related to the recent cybersecurity incident. The first one is about customers switching to another mobile operators. I understand that the number of customers switching to other MNO operators has been increasing more than the historical level. So I'd like to understand the company's position and response measures.
Speaker Change: <unk> has been increasing more than.
Speaker Change: The historical level, so I'd like to understand the company's position and response measures. Secondly, you have recently decided to suspend new subscriber sign ups are related to the recent cyber security incident I'd like to understand for how long the suspension will be maintained and what would be potential impact of this decision on your revenue.
Kim Joonsop: Secondly, you have recently decided to suspend new subscriber sign-ups related to the recent cybersecurity incident. I'd like to understand for how long the suspension will be maintained and what will be the potential impact of this decision on your revenue. And if you can answer these questions, it will help us understand the current situation.
Speaker Change: And if you can answer these questions. It will help us understand those current situation. Thank you.
Speaker Change: Yeah. She moon comes on these torchy jamjoom isn't in a bucket.
Youngsop Kim: Yes, thank you for the question. Regarding the two questions, the marketing strategy director has answered them. Thank you for your questions.
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Speaker Change: Thank you for your questions and as for your two questions are Mr. Yoon Jae own head of marketing strategy will answer them.
Jae Woong Yoon: And as for your two questions, Mr. Yoon Jae-woong, Head of Marketing Strategy, will answer them. Hello, I'm Jae Woong Yoon, Marketing Strategy Director. At the beginning of the hacking incident, there were some confusion and complaints from the users In this process, who moved to other companies increased more than usual.
Speaker Change: Yeah.
Speaker Change: I know, it's all about getting telephone without even doing that.
Speaker Change: He can talk to someone and you seem to China, you see imports obviously types of.
Speaker Change: Oh yeah.
Speaker Change: Longwall called Giga per month, something listen as I said to me, though.
Speaker Change: It's a tough hurdle for no you don't want it hung.
Speaker Change: Sometimes people done in monitoring gun goes it'll Huntington me, though.
Speaker Change: I am Yoon Jae, who head of marketing strategy.
Jae Woong Yoon: I am Yoon Jae-woong, Head of Marketing Strategy. In the beginning of this cybersecurity incident, it is true, yes, that there were some inconveniences and confusion due to the surge in customers demanding use and replacements or enrolling in use and protection service. And in this process, there was an increase in the number of customers who are switching to other networks. The customer base is the company's most important asset, and it is the foundation of mid-term revenue. For customer trust and for customer lock-in, it seems that a certain level of cost demand is inevitable. We well understand that the customer base is the most valuable asset of SK Telecom and a foundation for medium to long-term profit generation.
Speaker Change: In the beginning of this cyber security incident. It is true, yes that there were some inconveniences and confusion due to the surge in customers demanding use them replacements or enrolling in using protection service and in this process. There was an increase in the number of customers who are switching to other networks.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Cause I cut off.
Speaker Change: Can you speak to them to the gondola and somebody come in as well.
Speaker Change: Let them have fun and good.
Speaker Change: I mean it sounds.
Speaker Change: And if you want to.
Speaker Change: Prove up telcos would hope will emulate.
Speaker Change: We will understand that the customer base is the most valuable asset of SK Telecom and a foundation for medium to long term profit generation. Therefore, oh it will be inevitable that we have to bear some expenses to regain the trust of our customers and lock them in.
Jae Woong Yoon: Therefore, it will be inevitable that we have to bear some expenses to regain the trust of our customers and lock them in. The company is doing its best to protect its customers and stabilize the market. We will continue to monitor the market situation and respond. Currently, we are doing everything we can for customer protection and market stability, and we will continue to closely monitor the market situation and respond accordingly.
Speaker Change: Tons on a clipboard she's on dawn of yourself.
Speaker Change: Yeah, she doesn't call and she looks a little more entering humans or doing another question.
Speaker Change: Currently we are doing everything we can for customer protection and market stability and we will continue to closely monitor the market situation and respond accordingly.
Speaker Change: We want to do M&A and tuck them.
Jae Woong Yoon: I will answer the second question. In connection with the recent accident, according to the executive guidance of the Ministry of Foreign Affairs, the party is temporarily suspending the recruitment of new employees from May 5.
Speaker Change: Once I walk by Dennis or plugging them pulling away.
Speaker Change: You do it or don't kind of all oil because when you go to them with you.
Speaker Change: From then on wisdom.
Speaker Change: Moving onto your second question against the backdrop of the recent cyber security incident in accordance with the administrative guidance by the Ministry of Science and ICT, we have suspended new subscriber sign ups from me first.
Jae Woong Yoon: Moving on to your second question. Against the backdrop of the recent cyber security incident, in accordance with the administrative guidance by the Ministry of Science and ICT, we have suspended new subscriber sign-ups from May 5th. It has not yet been decided when the new recruitment will be resumed, but given that the purpose of this measure is to improve the shortage of U-SIM data, the U-SIM service has been 100% integrated, and it has been upgraded so that it can be used from today to roaming customers. In addition to the stabilization of U-SIM supply after mid-May, a re-setting of U-SIM has been introduced, and the replacement process of E-SIM has been simplified, so it is expected that the replacement demand will be handled smoothly.
Speaker Change: Okay.
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Jae Woong Yoon: Accordingly, we will discuss the government-related departments and the new recruitment system. As of now, it has not been decided whether and when we will be able to resume new signups. However, the recent suspension was made to secure enough supply of USIMs for affected customers. And we have already 100% of eligible customers enrolled in the USIM protection service. And now the USIM protection service has been upgraded to provide protection for roaming customers. And starting from mid-May, we believe that we will be able to get a stable supply of USIM. And we have introduced a USIM reset function and have simplified the process for ESIM replacement.
Speaker Change: I just hope no. It has not been decided whether and when we will be able to resume new sign ups. However, the recent suspension was made to secure enough supply of hue Sims for affected customers and we have already 100% of eligible customers enrolled in the using protection service and now they're using protection.
Speaker Change: This has been upgraded to provide protection for roaming customers and starting from mid May we believe that we will be able to get a stable supply of use them and we have introduced using reset function and have simplified the process for E. Sim replacement, so we will be able to handle.
Jae Woong Yoon: So we will be able to handle the demand for USIM and ESIM replacement going forward smoothly.
Speaker Change: The demand for you seem an ECM replacement going forward smoothly and then we will discuss when we will resume the new sign up together with the relevant government ministries on this matter.
Jae Woong Yoon: And then we will discuss when we will resume the new signup together with the relevant government ministries on this matter. The impact on the company's sales will vary depending on how long the new recruitment period lasts, so we will do our best to stabilize the market as soon as possible.
Speaker Change: Yeah.
Speaker Change: Thanks, Amit Should've mentioned in young you shouldn't do you think you're going to own them or not.
Speaker Change: And then I thought I saw was hung up because you get them a man she's done it was I'll call it out.
Speaker Change: So once you can give yourself so isn't it cost me the same thing.
Speaker Change: Most of you said you Didnt issued some anti Oakland 20, though because I'll tell you I don't want people I'll, let that he gets them.
Jae Woong Yoon: When the new recruitment period is resumed, we will let our investors know through a free notice. Upon your question on potential impact of this decision on our revenue will very much depend on for how long we will have to suspend new subscriber signups. And so we are doing our best to stabilize the market as quickly as possible. And we will voluntarily disclose to the investors and to the market when we finally decide to resume new signups.
Speaker Change: Upon your question on potential impact of this decision on our revenue will very much depend on for how long we will have to suspend new subscriber sign ups and so we are doing our best to stabilize the market as quickly as possible and we will voluntarily disclose to the investors into the market when we find.
Speaker Change: Only decide to resume new sign ups.
Speaker Change: Tom just a month ago.
Speaker Change: Uh huh.
Operator: I'll take the next question.
Speaker Change: Panama with them when they are too cheap.
Speaker Change: One touch and gourmet he sent me that the following question will be presented by San Juan Lee from Yolanda Securities.
Seung Won Lee: The following question will be presented by Seung Won Lee from Yuanta Securities. Please go ahead with your question.
Speaker Change: Go ahead with your question.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Pleasure.
Lee Seung Hoon: Hello, I'm Lee Seung Hoon from Yuhan Tajimkwon. This may be an extension of the previous question, but I'm curious about the overall financial impact of this accident. First of all, there are a lot of uncertainties, so it may be difficult to give a specific answer, but I'd like to ask you to give us an answer so that we can get a sense of what to consider and think about from the perspective of our investors. Also, I'd like to ask you to give us an answer on whether the Japanese dollar has maintained the same level as before, and whether this will affect the stock market in the future.
Speaker Change: Absolutely.
Speaker Change: On your screen.
Speaker Change: All in total you nikolas.
Tim.
Speaker Change: Good morning Bill.
Speaker Change: Oh, yes wouldn't be tomorrow, I hope, which is a little tough.
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Speaker Change: How many subs did have gone.
Speaker Change: It's a pretty well worn on the numbers.
Speaker Change: E P a dog eat dog Walker.
Speaker Change: Someday, we'll need it how long should you want on that that would be too soon.
Speaker Change: People want to do it.
Speaker Change: On that.
Operator: Thank you.
Speaker Change: Yeah.
Speaker Change: I am issue them from you on Todd Securities I'd like to ask some questions that I'd rather follow up question on the previous questions in short I'd like to understand the overall financial impact of the recent cybersecurity incident on your earnings performance I know that a lot of the factors have not been finalized so theres a lot.
Lee Seung Woong: I am Lee Seung Woong from Yuanta Securities.
Lee Seung Woong: I'd like to ask some questions that are rather follow-up questions to the previous questions. In short, I'd like to understand the overall financial impact of the recent cybersecurity incident on your earnings performance. I know that a lot of the factors have not been finalized, so there's a lot of uncertainty, but if you can guide us and provide us with some color on what factors and what situations and what factors that we need to consider as investors to understand potential financial impact.
Speaker Change: [noise] of uncertainty, but if you can guide us and provide us with some color on what all factors in what situations and what factors that we need to consider as investors to understand potential financial impact and moving them onto your Oh first quarter dividend amount or you decided to maintain it to the same level as the previous.
Lee Seung Woong: Moving on to your first quarter dividend amount, you decided to maintain it to the same level as the previous quarter. I'd like to understand if the recent incident will have any impact on your shareholder return policy.
Speaker Change: This quarter I'd like to understand if the recent incident will have any impact on your shoulder return policy. Thank you.
Speaker Change: The human comes on meter wasn't George I'm Gonna Julien.
Youngsop Kim: Yes, thank you for your question.
Youngsop Kim: First of all, I would like to ask about the financial impact of the cyber infringement. Thank you for your questions. I would first like to address your question on the overall financial impact of the recent incident on our performance. I think investors are most curious about the financial impact of the hacking incident on the company. There are many parts that are difficult to define in detail. However, we will first talk about the items or circumstances that open up the possibility, and we will explain in detail later on the details that are specified depending on the market situation or the investigation results.
Speaker Change: She knows how old are you.
Speaker Change: Thank goodness.
Thank you for your questions I would first like to address your question on the overall financial impact of the recent incident on our performance.
Speaker Change: I'm a component.
Speaker Change: Because I know that's a.
Speaker Change: So those are irrelevant because it caused them from going down in Washington.
Speaker Change: So can you pick two.
Speaker Change: A question to finish two mezzanine.
Speaker Change: No hockey or even three months to me, though.
Speaker Change: So you got your car then somebody at two Queen Marina So long to reach a rule when Jim I assume that would be cool, she telling us how long enough.
Speaker Change: Dara couture didn't implement trulia chassis for minimum dislocation.
Speaker Change: I understand that the investors would like to very much know all of the potential impact financial impact of the recent cyber security incident on our earnings performance, but at this point in time, we don't really have any specific details to share with you, but what I can do is to cover.
Youngsop Kim: I understand that the investors would like to very much know the potential impact, financial impact of the recent cyber security incident on our earnings performance. But at this point in time, we don't really have any specific details to share with you. But what I can do is to cover some of the related areas and potential measures that may have some financial impact. And then I will be able to provide you with more details as progress is made regarding the investigations and also market situation.
Speaker Change: Some other related areas and potential measures that may have some financial impact and then we'll be able to provide you with more details as progress is made regarding the investigations and also market situations.
Speaker Change: One Joe you seemed to check pier one.
Youngsop Kim: Relocation costs in the future... All of our 14 million customers are expected to be able to replace the U-shim. We are working on the schedule for the U-shim as soon as possible. We are currently making a financial plan in connection with this. First of all, as for USIM replacement, we are working based on the assumption that all 24 million customers may want to get their USIM replaced, so we're accelerating the shipment of USIMs as much as possible, and we're also developing financial plans accordingly. In the case of sales, there may be a negative effect due to the number transfer or the suspension of new recruits.
Speaker Change: Since I've been.
Speaker Change: Don't forget you should move to check how should we think hi, Joe Hi.
Speaker Change: You shouldn't.
Speaker Change: Of course kitchen kitchen, I think we will.
Are you a younger audience young Gainesville to teach them, Okay, which again, just who we send them.
Speaker Change: First of all as for you seem replacement that we are working at all based on the assumption that all the 24 million customers me. Once you get there you seem replaced so we're accelerating the shipments of your symptoms as much as possible and we're also developing our financial plans accordingly.
Speaker Change: You bet your choices are known potent whenever you're doing a single budget that in.
Speaker Change: Presumed Chuck young.
Speaker Change: <unk> seen them day cause you picked this afternoon.
Youngsop Kim: The impact level may vary depending on the number transfer rate and the timing of the resumption of new recruits. The Seongyong Electrical Company invested 3.ish billion seven hundred million won Please understand that it is difficult to give specific numbers at this time. And regarding any potential negative impact on our revenue, this may be expected due to some mobile carrier change or suspension of new subscriber signups. But the size of such impact is dependent on a future telco switch trends and when we will be able to resume new subscriber signups. So please understand that we will not be able to offer any specific numbers at this point.
Speaker Change: I know you're doing a chihuahua chicken wood chips, I guess something et cetera.
Speaker Change: I couldn't forgive me, though.
Speaker Change: Are you considering selling my syndication volume, it's a huge issue about them either.
Speaker Change: Yeah.
Speaker Change: And regarding any potential negative impact on our baby new this may be expected due to some mobile carrier change or suspension of new subscriber sign ups, but the size of such impact is dependent on our future telcos switch trends and when we will be able to resume new subscriber sign ups.
Speaker Change: So please understand that we will not be able to offer any specific numbers at this point.
Speaker Change: Could you go I think I'm getting I'm, just a film doors.
Youngsop Kim: And we can also think about potential costs such as overbidding, and this is also the result of a joint investigation by the Ministry of Foreign Affairs and the Ministry of Public Relations, which is currently in progress. Also, additional potential costs such as administrative penalties may be considered, but whether such costs would be incurred is again dependent on so many factors, including the results of the ongoing joint investigation led by the Ministry of Science and ICT and investigation by the Personal Information Protection Commission, and the potential amounts are also difficult to estimate at this point in time.
Speaker Change: Okay pushing them to you.
Speaker Change: She can just screw which engine I gave you.
Speaker Change: Or you can go on up to them, which was unwell cable you choose okay, well to get that Oh beyond.
Speaker Change: P M posting your pool of Jumbo Cookie Moodle, you don't forgive me, though.
Speaker Change: Also additional potential cost such as administrative penalties, maybe considered but whether it's such costs would be incurred is again dependent on so many factors, including the results of the ongoing joint investigation that by the Ministry of Science, and ICT and investigation by the personal.
Speaker Change: Formation Protection Commission and the potential amounts are also difficult to estimate at this point in time.
Speaker Change: But how do we know Jim we still took an eat shimbun, they've got you.
Unknown Executive: Kim Jae-in, Unknown Executive, SK Telecom Co Ltd. We believe that it is the only way to reduce additional losses and restore the company's value. We believe that it is the only way to reduce additional losses and restore the company's Negative financial impact due to the recent cyber security incident may be inevitable.
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Speaker Change: <unk> will get bought or the PD. One is sourced through took share so cool too.
Speaker Change: So she said how much was like Johnson Chou missed your pool of cookies.
Speaker Change: And probably a hypocrite in wuxi.
So I'm looking at more of a tenant.
Speaker Change: We do it and so you should always she's a cool joke, a true triple question and give you that what kind of company though.
Speaker Change: Negative financial impact due to the recent cyber security incidents may be inevitable. However, we believe that it is crucial for us to put in all of the available resources as quickly as possible to stabilize the market and regain trust from our customers.
Unknown Executive: However, we believe that it is crucial for us to put in all the available resources as quickly as possible to stabilize the market and regain trust from our customers. And this will be the best way in the long run to minimize any potential losses and recover our corporate value.
Speaker Change: This will be the best way in the long run to minimize any potential losses and recover our corporate value.
Speaker Change: U S, which was you have.
Speaker Change: I've been to Rio Tinto.
Operator: We'll answer the questions submitted by the viewer.
Speaker Change: Moving on to your question on potential change to our shareholder return policy.
Youngsop Kim: Moving on to your question on potential change to our shareholder return policy. The Security Reopening Committee понял behaviors of members of Thank you. We understand that market participants would like to know whether there will be any change to our shareholder return policy due to the recent incident. I don't think there will be any financial impact on the accident. So, as of now, I can say that there is no change in the basic principle of maintaining a stable dividend. Certain levels of financial impact would be inevitable related to the recent incident, but it is rather too early to estimate any potential financial impact with any certainty.
Speaker Change: Combine that kings out or should you want us to give kind of a synergy you hope it is oh, she's asking is because I'm not.
Speaker Change: We may have called tissue close at all.
Speaker Change: We sent out.
Speaker Change: We understand and market participants would like to know whether there will be any change to our shareholder return policy due to the recent incident.
Speaker Change: Oh, My goodness, Oh, Germany surgeon and distributor.
Speaker Change: To check.
Speaker Change: Those rules single and.
Speaker Change: Hope Richemont G Cookie motor.
Speaker Change: So you might see me, though.
Speaker Change: In Jerusalem, because all in Zhengzhou predominantly agenda and a coupon on skippy.
Speaker Change: Who did you see some either.
Speaker Change: Certain levels of financial impacts would be inevitable related to the recent incident, but it is whether it too early to estimate any potential financial impact with any certainty. So what I can say is that our basic principle of maintaining stable dividends for shareholder returns remains the same.
Youngsop Kim: So what I can say is that our basic principle of maintaining stable dividends for shareholder returns remains the same.
Speaker Change: Once again when.
Soojin Kim: If there are no further questions, we will take one more question. The following question will be presented by Soojin Kim from Mirae Asset Securities. Please go ahead with your question.
Speaker Change: Hum.
Speaker Change: I'm a month of August.
Speaker Change: Hi, onward, with whom we need to shape when they meet a UCITS in Gwinnett County, Virginia.
Speaker Change: The following question will be presented by Susan Kim from Mirae asset Securities. Please go ahead with your question.
Speaker Change: Okay.
Speaker Change: Jim already answered about Oh, I can't quite on that front.
Soojin Kim: Hello, thank you for the opportunity to ask a question. I would like to ask you a business-related question because you mentioned hacking earlier. Regarding the DC business, the AI DC business has grown in two places in the last two years.
Speaker Change: Thank you Ralph I'll talk talking Neil.
Speaker Change: Yeah cause here.
Speaker Change: Keep all quiet on that at all so you're bumping yeah, you're right. It's just.
Speaker Change: I have to tell them that they provided.
Speaker Change: Hum.
Speaker Change: Yeah.
Soojin Kim: I am curious about the future plan to expand the AI DC business, and I would like to ask you to tell us about the benefits of AI DC.
Speaker Change: So.
Speaker Change: Well I think as long as they are called to Colorado.
Speaker Change: That's all I can talk with you guys.
Speaker Change: Yeah.
Speaker Change: Thank you for the opportunity to ask questions because our questions were already asked regarding the recent cybersecurity incident I'd like to ask a question on Europe business situations and plans are for your AI D. C business recorded a double digit growth rate on a year over ear.
Soojin Kim: Thank you for the opportunity to ask questions, because questions were already asked regarding the recent cyber security incident, I'd like to ask a question on your business. Situations and plans for your AIDC business. It recorded a double-digit growth rate on a year-over-year basis So I'd like to understand your future AIDC operation and expansion plans and if you can give us some color on the profitability of AIDC business, it would be great Thank you for your question.
Speaker Change: [noise] basis, so I'd like to understand your future AI D C operation and expansion plans and if you can give us some color on the profitability of a D. C business it would be great. Thank you.
Speaker Change: She moved up some.
Speaker Change: She and viewing it isn't a huge important was there any type of entities to me though.
Lee Hyunwoo: The question was answered by the Director-General of AITC. Thank you for your questions.
Speaker Change: Thank you for your questions and for your questions. Mr. Itoh, No head of AI D C development will address them.
Lee Hyunwoo: As for your questions, Mr. Lee Hyunwoo, Head of AIDC Development, will address. I'm Lee Hyunwoo, the chief executive of AIDC.
Speaker Change: Yeah.
Speaker Change: One was that you don't even need a three.
Speaker Change: Data center.
Lee Hyunwoo: I'd like to ask you about the expansion plan of the data center. Thank you for your question. In addition, we are developing a hyper-scale AI-specific data center at the regional point of cooperation with global big tech. will be able to communicate with you in more detail when the plan is finalized. In addition to this, we are planning to build a new data center in the metropolitan area. Our pipeline is planned until 2030, so we want to steadily increase the capacity of the data center.
Speaker Change: Hum.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: As a data center deployment.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yoga.
Speaker Change: Global quota.
Speaker Change: So hyperscale.
Speaker Change: Peterson.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: So if you could tell us.
Speaker Change: Oh man.
Speaker Change: So twice to secaucus.
Speaker Change: No question.
Speaker Change: But all spoken there.
Speaker Change: Okay.
Speaker Change: So in your pipeline that you, sometimes some don't cause you to go.
Speaker Change: Oh.
Speaker Change: It'll take us into <unk>.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Amy a new head of AI D. C development. So as for your question on our medium to long term a D C or D. C business expansion plan as of now we are operating eight data centers, including the young Jewel data Center, which recently opened in February a Furthermore, we are working on a project.
Lee Hyunwoo: I am Yeonwoo, head of AIDC development. As for your question on our medium to long-term AIDC or DC business expansion plan, as of now, we are operating eight data centers, including the Yangju data center, which recently opened in February. Furthermore, we are working on a project to build a hyperscale AI data center in regional headquarters or in regional hubs in close cooperation with the global big tech. And our target is to open hyperscale AI data centers by 2027. And when we have more detailed plans, we will communicate them with the market. In addition, we already have put in place plans to establish new data centers in the Seoul metropolitan area.
Speaker Change: To build a hyperscale data center and regional headquarters or in a regional hubs in class close cooperation with the global picture Big Tech and our target is to open Hyperscale Ada AI data centers by 2027, and when we have more detailed plans, we will communicate them with a mark.
Speaker Change: Get them. In addition, we already have put in place plans to establish new data centers in the Seoul Metropolitan area. So we have a pipeline until 2034.
Lee Hyunwoo: So we have a pipeline until 2030 for capacity expansion, and we will continue to increase our data center operational capacity gradually.
Speaker Change: Has that expansion and we will continue to increase our data center operational capacity gradually.
Speaker Change: Yeah too hung up.
Lee Hyunwoo: In addition, as the AI era begins to open up, the data center business is evolving from a traditional call location-centered data center to a complete AI data center. We expect new demands to arise around this, so we are early preparing business models that can respond to these AI data center demands. Furthermore, with the full-fledged opening of the AI era, we understand that the existing co-location-based data center business model is quickly switching to a new AI data center business model, and we expect that new types of demand in the market will continue to emerge. So we are working to proactively establish our new data center business models to respond to these demands.
Speaker Change: So that's all data center business.
Speaker Change: Okay.
Speaker Change: Oh no no no.
Speaker Change: Data center similar when you do something similar with Huntsville, excuse me, replacing like also some marketing there.
Speaker Change: Data Center business.
Speaker Change: Smith.
Speaker Change: Furthermore, with a full fledged opening of the AI era, we understand that the existing co location based data center business model is quickly switching to a new AI data center business model and we expect a new types of demand in the market will continue to emerge. So we are working to proactively.
Speaker Change: Establishing a new data center business models to respond to these demands.
Speaker Change: Merck.
Speaker Change: That's what you do in AI data center, you want us to get through kind of chunky pure as a service and launching okay Oh.
Lee Hyunwoo: Last year, we launched a subscription GPU-as-a-Service service that allows you to use AI data centers with high-performance GPUs. Based on our cooperation with Global Big Tech, we have created the first hyperscale-class AI data center in Korea. To give you more details, we already launched the subscription-based GPU-as-a-Service at the end of last year so that customers can quickly get access to AI data centers with high-performance GPUs. And as I mentioned earlier, we are cooperating with a global big tech company so that we can establish Korea's first hyperscale AI data center. In addition, since there are consumers who require a rapid acquisition of low-capacity AI data centers, there are also customers who want to own a modular AI data center or their own AI data center for them, so we are planning to provide dedicated AI centers such as dedicated AI centers that provide customized turnkeys for these customers.
Speaker Change: Hum.
Speaker Change: No it's actually a hyperscale.
Speaker Change: For some time.
Speaker Change: Me, though.
Speaker Change: To give you more details we already launched the subscription based GPU as a service at the end of last year. So that customers can quickly get access to AI data centers with high performance Gpus and as I mentioned earlier, we are cooperating with a global big Tech companies. So that we can establish Korea's first.
Speaker Change: Hyperscale data center.
Speaker Change: You bet.
Speaker Change: Data center solutions for cooking.
Speaker Change: You didn't have you on board.
Speaker Change: And to no.
Speaker Change: Okay, I didn't take us into the pool.
Speaker Change: Quick duty.
Speaker Change: Hum.
Joan Tong: From Joan Tong T rule to go around and dedicated.
Speaker Change: Computing.
Speaker Change: No.
Speaker Change: In addition, we are building and developing a new business models, including a modular AI data center business model, where those who need quick access to low capacity, yet dinner center can utilize as well as the dedicated AI data center business model, where customers who want to possess their own AI data.
Lee Hyunwoo: In addition, we are building and developing new business models, including a modular AI data center business model where those who need quick access to low-capacity AI data center can utilize, as well as the dedicated AI data center business model where customers who want to possess their own AI data centers can receive a tailored turnkey project.
Speaker Change: <unk> can receive a tailor a turnkey projects.
Speaker Change: Yeah, Tony visiting them.
Speaker Change: And she's doing a deal.
Lee Hyunwoo: To sum up, we will provide AI data centers that meet the needs of the fast-changing market and build a strong AI infrastructure that is based on our company's AI business. So in summary, we will continue to supply AI data center in order to meet changing needs in the market, while establishing the AI infrastructure domain as a foundational business for SK Telecom.
Speaker Change: AI data center to talk to you you can depend on them and so what do you say you guys have a coupon.
Okay.
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: So in summary, we will continue to supply AI data center in order to meet changing needs in the market a while establishing the AI infrastructure domain as a foundational business for SK telecom.
Speaker Change: Once you determine that there's all type of.
Speaker Change: Pieces in place all of this speaks only of their so my assumption in there.
Lee Hyunwoo: I would like to explain about the profitability of our data center business. From the perspective of EBITDA and MARDIN, our data center business is classified as a business area of SK Broadband. Therefore, it is difficult to distinguish the level of EBITDA of the data center business, which has to consider indirect distribution, but the EBITDA margin of the data center business is at the level of SK Broadband's connected EBITDA margin.
Speaker Change: Some of it Tonight.
Speaker Change: I don't want to be known.
Speaker Change: We'd relocate us into so I'm going to ask a protocol in the shops.
Speaker Change: Uh huh.
Speaker Change: Doing the kinds of people have been doing.
Speaker Change: Data centers home money, maybe that's what's in there.
Speaker Change: Who knows Apache in the audience.
Speaker Change: SK broadband.
Speaker Change: And it was hungry Huntington's, Virginia, So data center.
Speaker Change: Okay.
Speaker Change: Moving onto your second question on the profitability of our data center business in terms of EBITDA margin I would first like to mention that our data center business is classified as B to B business for SK broadband and for this reason it will it's difficult to separate the and calculate it.
Lee Hyunwoo: Moving on to your second question on the profitability of our data center business in terms of EBITDA margin, I would first like to mention that our data center business is classified as B2B business for SK Broadband. And for this reason, it's difficult to separate and calculate EBITDA margin for data center business only in consideration of allocation of indirect costs and expenses.
Speaker Change: The margin for a data center business only in consideration of allocation of indirect costs and expenses. However, what I can say is that AI or data center business EBITDA margin is slightly higher than the consolidated EBITDA margin of SK broadband.
Lee Hyunwoo: However, what I can say is that AI or data center business EBITDA margin is slightly higher than the consolidated EBITDA margin of SK Broadband.
Speaker Change: I'm sorry, you go through on a conference call a bunch of little August.
Operator: This concludes today's press conference. If you have any additional questions, please contact the IR organization. Thank you.
Speaker Change: When you click one notch from once every six months.
Speaker Change: As you go to when you bought them.
Speaker Change: I'm sorry.
Speaker Change: Thank you and now we would like to conclude the earnings conference call for SK Telecom. If you have any additional questions. Please contact the IR team. Thank you.
Operator: Now we would like to conclude the earnest conference call for SK Telecom. If you have any additional questions, please contact the IR team. Thank you.